Friday, October 05, 2012

Fixing Health Care

Listening to the presidential debate on how to insure everyone's health care without penalize those with higher expected medical expenses is amusing because it's redistribution masquerading as some simple engineering problem. It's always more efficient in these scenarios to simply redistribute, rather than play games so no one sees this as what is really going on, but then this is a harder sell and thus the equilibrium.
I was struck by this line in David Henderson's review of Priceless by John Goodman:

Strong evidence for Goodman’s view that there are good effects from having consumers face real prices for health care comes from the area of cosmetic surgery. Such surgery, he notes, is rarely covered by insurance. He points out that, uunlike in most areas covered by insurance, patients can typically find a package price that includes all services and facilities and compare prices prior to surgery. Moreover, he notes, prices adjusted for inflation have fallen over time
as technology has improved. He notes that for the kinds of surgery covered by insurance, improvements in technology are blamed for rising prices.

I'm reminded of the saying that things are never so bad that they can't get worse, which is where I see us going. Less regulation seems improbable regardless of who wins the election.